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(i)
b b 2 4ac
2a
x2 2x 0
b 2 4ac 2 2 41 0 4 0
b b 2 4ac 2 4 2 2
2a
21
2
22
2
2
22
x
0
2
(ii) 3x 6 x 1 0
Multiply out the quadratic
3x 2 3x 6 0
Divide across by 3
x2 x 2 0
b 2 4ac 1 2 41 2 9 0
b b 4ac 1 9 1 3
2a
21
2
1 3
2
2
1 3
x
1
2
(iii) 9 x 2 24 x 16 0
a=9, b=-24, c=16
one solution
b b 4ac 24 0 24
1.33
2a
2 9
18
(iv) 3x 2 2 x 3 0
a=3, b=2, c=3
b 2 4ac 2 2 4 3 3 4 36 32 0
no solution
(v) 2 x 2 11x 21 0
a=2, b=11, c=-21
two solutions
b b 2 4ac 11 289 11 17
2a
2 2
4
11 17
1.5
4
11 17
7
4
(vi) 2 x 2 x 10 0
a=-2, b=1, c=10
b 2 4ac 1 4 2 10 81 0
2
two solutions
b b 2 4ac 1 81 1 9
2a
2 2
4
1 9
2
4
1 9
2.5
4
2 A firms demand function for a good is given by P = 107-2Q and their total
cost function is given by TC = 200+3Q .
i) Obtain an expression for total revenue profit in terms of Q
Total Revenue = P.Q
TR = (107-2Q)*Q = 107Q-2Q2
Profit = TR-TC
Profit = 107Q-2Q2-200-3Q = -2Q2+104Q-200
ii)
For what values of Q does the firm break even
Firm breaks even where Profit = 0
-2Q2+104Q-200 = 0
a = -2, b=104, c=-200
iii)
Illustrate the answer to (ii) using sketches of the total cost function,
the total revenue function and the profit function
Proft = 1150
2000
TC / TR / Profit
1500
1000
TC
500
TR
0
0
10
20
Q = 26
30
40
50
Profit
Profit
-500
From the graph estimate the maximum profit and the level of output
for which profit is maximised
Maximum profit at max point on profit curve.
Max profit = 1150 at Q = 26
3. What is the profit maximising level of output for a firm with the marginal
cost function MC = 1.6Q2-15Q+60 and a marginal revenue function MR =
280-20Q?
Profit is maximised where MR=MC
280-20Q = 1.6Q2-15Q+60
1.6Q2+5Q-220=0
a=1.6, b=5, c=-220
Q
5 2 41.6 220
21.6
25 1408
5 37.85
3.2
3.2
Q 10.27, Q 13.39
Q
60
TR = P.Q
Q = 130-10P
10P = 130-Q
P = 13-Q/10
TR = (13-Q/10)*Q = 13Q-0.1Q2
TC = FC+VC
TC = 60+4Q
ii)
For what values of Q does the firm break even
Firm breaks even where TR = TC
13Q-0.1Q2=60+4Q
-0.1Q2+9Q-60=0
a=-0.1, b=9, c=-60
Q
9 2 4 0.1 60
2 0.1
9 81 24
9 7.55
0.2
0. 2
Q 7.25, Q 82.75
iii)
iv)
Use the graph to confirm your answer to (ii) and to estimate maximum
profit and the level of output for which profit is maximised
Profit = TR-TC
Profit = 13Q-0.1Q2-60-4Q=-0.1Q2+9Q-60
200
Profit
150
Profit Max
Profit = 143
100
Profit
50
0
0
-50
-100
10
Break Even
Q = 7.25
20
30
40
50
Profit Max
Q = 45
60
70
80
Break Even
Q = 82.75
90